China stocks end higher for fourth straight day

Business Tuesday 16/May/2017 12:35 PM
By: Times News Service
China stocks end higher for fourth straight day

Shanghai: China stocks reversed earlier losses to end higher for the fourth straight day on Tuesday, as investors were relieved by central bank efforts to boost liquidity in the financial system even as regulators announced fresh curbs on shadow banking.
The blue-chip CSI300 index rose 0.9 per cent, to 3,428.65 points, while the Shanghai Composite Index gained 0.7 per cent to 3,112.96 points, both posting their best day in five weeks.
Late on Monday, China's banking regulator tightened disclosure rules on lenders' wealth management products (WMPs) in its latest move to curb shadow banking and risky investments.
Separately, the China Banking Regulatory Commission (CBRC) unveiled plans to publish a flurry of regulations later this year to control financial risks.
On the trading floor, however, concerns over tighter regulations that have knocked the market recently were partly offset by signs the government is moving to keep the economy well funded.
On Tuesday, China's central bank injected a net 170 billion yuan ($24.67 billion) into money market through open market operations — the most in nearly four months — to offset liquidity stress caused by corporate tax payment and maturing repos.
In a rare explanation, the central bank said the injection is meant to "offset impact from factors including tax payment and maturing open market operations", indicating Beijing's intention to maintain stability in the markets amid widespread concerns over policy tightening.
Analysts say the market is likely to stabilize after staying in the red for five consecutive weeks as regulators try not to go too hard in their quest to curb debt risks.
"The market is increasingly likely to stabilize," Li Chao, analyst at Huatai Securities wrote.
"If the market misunderstands policy intentions and continues to fall, there will be more soothing remarks from government agencies."
Most sectors gained ground, led by consumer and material stocks, while banks shares dragged the most.
Small-caps outperformed the broader market, with the index tracking small and medium sized companies in Shenzhen advancing 2 per cent, posting its best day in 9 months.